Analysis: The derivative market is reflecting a reversal of Bitcoin's bearish sentiment, with increased demand from long positions.

BlockBeats News, November 27th, according to Bloomberg, despite Bitcoin experiencing a retracement of up to 36% from its all-time high set in early October, the cryptocurrency's implied volatility remains at a relatively controlled level. This change reflects that as Bitcoin gradually moves towards institutionalization, its risk transmission mechanism is being reshaped. In the early stages, Bitcoin's value was mainly driven by speculative traders who sought to profit from its frequent and large price fluctuations.

The derivatives market overall is reflecting a reversal of bearish sentiment. According to Coinglass data, demand for long positions in Bitcoin perpetual contracts, a high-leverage trading market commonly used by cryptocurrency traders, is currently rising, while the open interest size is at a relatively moderate level. The funding rates of these contracts have turned positive, indicating that after falling into negative territory earlier this week, bullish bets are once again dominant. Deribit data shows that the most open interest in bullish options with a strike price of $100,000, while in the previous week, the market was mainly focused on downside protection around $80,000 and $85,000.

Spencer Hallarn, Head of OTC Trading at GSR, stated: "In the past few weeks, speculative long positions have significantly decreased, as evidenced by the reduction in open interest and funding rates of perpetual contracts. This also prepares the cryptocurrency market for the next leg up."